However, the regulatory filing also calls for a 45-day “go-shop” period for SolarCity, after which a “no-shop” period will follow.
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The transaction is seen to close in the fourth quarter, subject to receiving the green light from regulators and disinterested shareholders of both Tesla and SolarCity.
CEO Elon Musk speaks at the unveiling of the Model 3 at the Tesla Motors design studio Thursday, March 31, 2016, in Hawthorne, Calif. The promise of an affordable electric vehicle from Tesla Motors had hundreds of people lining up to reserve one.
The companies said on Monday that SolarCity stockholders would receive 0.110 Tesla common shares for every share held.
Elon Musk, the founder of Tesla and a board member of SolarCity, has also been trumpeting that ability of the combined companies to be leaner and work well together.
“You’d walk into the Tesla store and say: ‘I’d like a great solar solution with a battery and an electric auto, ‘ and in five minutes you’re done”, Musk said.
SolarCity had formed a special committee to review Tesla’s initial offer, which was pitched at 0.122 to 0.131 Tesla shares for each SolarCity share. In the final agreement, the ratio is smaller, with 0.11 Tesla shares going for each of SolarCity.
The SolarCity post did not specify a headcount reduction, and the deal is certainly about much more than that, but it is safe to assume some employees should get a bit nervous.
SolarCity’s shares, which had risen about 26 per cent since Tesla first made the offer on June 21, were down 3.75 per cent at $25.70 before the bell on Monday.
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SolarCity’s debt load from its reliance on net metering policies to fuel installation growth stoked some fears among Tesla shareholders, precipitating a sudden drop in its stock. The announced deal has not caused us to change our mind. But the stock has since recovered, reaching above $234 last week.
